CA Economic Fundamentals 2008 (07,08)

[joeiannuzzi]

What`s Behind the Curtain?
Canada
2008 (07,08)
Daily Online Edition

 

[joeiannuzzi]

Before you commit to credit cards

A credit card may seem like the perfect partner to anyone with an empty wallet staring longingly at a dress with just the right fit or the newest Wii videogame. But beware; if you`re someone without a budget -- or self-control -- jumping blindly into a relationship with this piece of plastic can leave you badly burned.If you don`t understand what you`re getting yourself into, you`re not ready.So what is it about credit cards? They seem like the perfect solution for those of us practically living paycheck to paycheck, right? How many times have you wanted to book that flight to Europe but just didn`t have the funds right now? This is the beauty of charging; immediate gratification. But there is a downside to having the ability to buy whatever you want, whenever you want.

http://www.financialpost.com/reports/story.html?id=615747

 

[joeiannuzzi]

Management fees can affect mutual fund investments

Dear Mike: Are mutual fund fees dropping? If so, is it in all funds or just some of them?

Daniel in Vancouver

You may have heard that some mutual fund companies are reducing management fees. You might even own funds that have recently cut fees. But what are management fees, and how do they affect your investments?

http://www.canada.com/victoriatimescolonis...b7-d670c74a1884

 

[joeiannuzzi]

Analysts see strong second half for economy

TORONTO - Canada`s economic fundamentals will weaken in the second half of this year, even though economists agree growth will be stronger than in the first half.

The premise might sound odd, but Adrienne Warren, senior economist at Scotiabank, said it is possible because a number of temporary factors at the start of the year -- such as heavy winter snow, the unwinding of excess inventories, and strike activity at automotive plants -- masked the strength in the economy and caused the 0.1-per-cent drop in first-quarter gross domestic product.

"In the second half of the year, we could see better headline figures in GDP growth of about 1.5 per cent ... but the underlying details of the growth in Canada, I think, will actually be weaker," Ms. Warren said.

http://www.canada.com/ottawacitizen/news/b...da-ff6366432d62

 

[joeiannuzzi]

IMF sees no relief in food prices

NEW YORK -Speculators don`t appear to be to blame for the doubling of commodity prices over the past couple of years, but that doesn`t mean relief from high food prices is in sight, according to a new report from the International Monetary Fund.

The IMF expects the food price surge to take longer than usual to unwind because of the likelihood of further increases in the production of biofuels, continued strong growth in developing countries and the added expense of record-high oil prices.

http://www.canada.com/windsorstar/news/bus...ae-b02d5d291d99

 

[joeiannuzzi]

The New Stagflation

In a surprise move, the Bank of Canada refrained from trimming overnight interest rates on June 10th despite the negative posting for Q1 GDP and the threat of a global slowdown. At the last policy decision on April 22nd, the Bank had said "some further monetary stimulus will likely be required to achieve the inflation target over the medium term". The Bank now joins the Fed and the ECB in a shift to mounting inflation concern that seems to portend a growing probability of rate hikes down the road. Just how far down the road, of course, depends on the future path of inflation, growth and financial market distress. While the financial crisis appears to have ebbed, recent worries regarding Lehman Brothers, UBS and others have taken U.S. financial stocks to new lows, and triggered renewed growth concerns.

http://www.sherrycooper.com/article.php3?article=bl20080616

 

[joeiannuzzi]

Canadian dollar expected to slip versus greenback

Currencies - The Canadian dollar will fall steadily versus the U.S. dollar during the next 12 months as commodity prices weaken and the gap between domestic and U.S. interest rates narrows, according to a Reuters poll released Wednesday.

http://www.canada.com/calgaryherald/news/c...42-d6e53a395104

 

[joeiannuzzi]

Retirees risk outliving their savings

Canadians planning for retirement should take into account they`re living longer and spending more on health care, says the head of one of Canada`s leading financial services companies.

"All this adds up to a growing risk of people outliving their money," Dean Connor told a Vancouver Board of Trade luncheon yesterday at the Renaissance Vancouver Hotel Harbourside.

"In 1840, the life expectancy for the gold-medal-record-holding country [Sweden] was 45 years, and by 2000, life expectancy for the the gold-medal-record-holder [Japan] had increased to 85 years.

http://www.canada.com/theprovince/news/mon...5f-add3c6cd69b0

 

[joeiannuzzi]

Canada`s job market better than most, think-tank reports

Canadians are a bit more likely than Americans to be working, but also more likely to be working for a lot less, according to an international labour-market report yesterday.

Still, Canada`s labour market is in better shape than those in most industrialized nations, especially in the youth job market, due in part to the fact that young Canadians commonly gain work experience while still in school, says a report by the Organization for Economic Co-operation and Development.

http://www.canada.com/ottawacitizen/news/b...ee-d642922b7c71

 

[joeiannuzzi]

Ethanol policies misguided: think-tank

OTTAWA (CNS) -- Canadian governments are pursuing "misguided" policies in promoting ethanol production as a way of reducing greenhouse gases, says a report from an influential think-tank.

The C.D. Howe Institute study said Thursday there is no conclusive evidence that ethanol reduces carbon output or energy use, once the entire production cycle is taken into account, and that the cost per tonne of reduced greenhouse gases is roughly seven times more than alternative policy measures.

http://www.canada.com/saskatoonstarphoenix...5d-cb81c1069717

 

[joeiannuzzi]

Economic slide will be brief, bank forecasts

An unexpected first-quarter contraction in the Canadian economy will not be repeated, the country`s largest bank forecast yesterday.

The weakness in the U.S. economy, which shed thousands more jobs last month and where consumer confidence continues to plunge, will remain a drag on growth here, but that will be more than offset by domestic strength, RBC Financial Group said in its latest forecast.

Growth will slow to 1.4 per cent this year, half of last year`s 2.7-per-cent expansion, but then rebound to 2.5 per cent in 2009, it forecast.

http://www.canada.com/ottawacitizen/news/b...3a-833d45541ab1

 

[DragonflyProperties]

Hi all,
From the July 3rd edition of the Globe and Mail (Report on Business):

ECONOMY


The party`s over for Canadian spendthrifts
<H3 id=deck>Fewer jobs, a housing market chill, soaring energy and food costs - consumers won`t be spending like `drunken sailors` any more. </H3>Excerpts:

Canadian consumers, facing softer job creation and a chill in the housing sector, are likely to rein in the spending that has fuelled the economy, economists say. Record energy prices and rising food costs could spook consumers into an even sharper pullback, they caution, though the situation now is not dire.

"I do think consumer spending has really only got one direction to go in this kind of environment, and that`s toward slower growth," said Douglas Porter, deputy chief economist at Bank of Montreal, who noted that the country is coming off one of the strongest spending periods in decades.

"Over all, are we expecting things to be a bit softer in `08 and `09 than they have been in the last few years? Most definitely. That being said, this is not the early 1990s," he said, noting that relatively speaking, Canada is still in pretty good shape.

Mr. Alexander said that "virtually every single key driver for consumer spending suggests that things are going to slow down."

"In the housing market, we`ve already seen very clear signs that it`s cooled down, and I think that this is going to translate into weaker spending on ... housing-related items," he said.

http://www.theglobeandmail.com/servlet/sto...ry=tara+perkins

Keith

 

[joeiannuzzi]

Decline in employer pension coverage continues

The long-term decline in the proportion of Canadian employees covered by employer pension plans continues, a trend with negative implications for the financial well-being of future retirees, and which likely will add to the future cost to taxpayers of financing the country`s old-age security system.

"After only a modest gain in 2005, membership in employer registered pension plans resumed normal growth in 2006, entirely the result of increases among women," Statistics Canada said in its latest annual report on pension plans in Canada.

http://www.canada.com/ottawacitizen/news/b...50-692494d45d18

 

[joeiannuzzi]

What kind of borrower are you?

Credit scores and reports are important, and not just for home buyers. Folks standing in line July 11 to buy a new iPhone will find they won`t be able to activate it if they fail their in-store credit check.

Landlords, employers, banks, car dealers and insurance companies all want to know what kind of borrower you are before they do business with you.

http://www.nationalpost.com/todays_paper/s....html?id=633160

 

[joeiannuzzi]

Oil prices hit grocery shelves

OTTAWA -- Oil prices are approaching $150 a barrel and that`s driving gas prices upward; but if you think getting to the grocery store is the costly part of the trip, wait until you get through the doors.

Oil is at the top of the consumer food chain and its increased cost is trickling down, fuelling a domino effect on the cost of products and services that most Canadians use and buy every day. From taxis to toilet paper, dry-cleaning to diapers, higher prices for just about everything it seems, are being linked to oil prices.

This is all coming despite figures released Friday saying the volume of gasoline sales, and also of most other fuels, has started to fall.

http://www.canada.com/saskatoonstarphoenix...48-8041eb60410a

 

[joeiannuzzi]

Canadian airports flying high

These are turbulent times for air travel.

Profits at the major carriers are being threatened by soaring fuel prices and passengers are being hit by higher fares and surcharges to cover those additional costs.

At the same time, there`s a growing awareness -- among consumers and corporate leaders -- of the environmental impact of carbon emissions and concerns over how to reduce them.

http://www.canada.com/saskatoonstarphoenix...82-548da6229fc1

 

[joeiannuzzi]

BCE reaches $35 billion agreement

MONTREAL — BCE Inc. has finalized a takeover bid worth $52 billion in cash and debt led by the Ontario Teachers` Pension Plan, and the acquisition price remains $42.75 per share.

Shares in Canada`s largest telecommunications company moved higher to $39.50 shortly after the stock resumed trading at 10 a.m. ET on the Toronto Stock Exchange. "The purchaser and the lenders have delivered fully negotiated and executed credit documents for the purpose of funding the transaction, including an executed credit agreement and other key financing documents," BCE said in a statement Friday morning.

http://www.torontosun.com/News/TorontoAndG...04/6067236.html

 

[joeiannuzzi]

A dose of pessimistic reality: There`s a storm on the horizon

Even if you don`t own a vehicle or a home, relentlessly rising oil and gas prices are hammering your budget. That`s because energy costs are internalized in almost everything you buy and everything you do.

Parents are seeing increases in the cost of Huggies diapers, bakers are paying more for plastic packaging, homemakers are paying more for detergents, cosmetics and drugs. Even that polyester fleece you`ll need to ward off the chill after lowering the thermostat next winter will be more expensive, all because petrochemical companies who manufacture the resin for these and myriad other products have raised prices by 50 per cent.

Food prices are going up, not only because corn, grain and edible oils are being foolishly diverted to bio-fuels, but also because fertilizer is manufactured from natural gas.

http://www.theglobeandmail.com/servlet/sto...Story/TPComment

 

[joeiannuzzi]

Text message levy sparks outrage

OTTAWA -- Cellphone users are about to be hit with new fees as two of Canada`s telecommunications giants plan to bring in a levy on incoming text messages.

Bell Mobility will begin charging customers 15 cents per incoming text message on Aug. 8. Telus Mobility is moving to the same billing practice effective Aug. 24.

Until now, their pay-per-use customers who send text messages have been charged a 15-cent fee per message, but it hasn`t cost anything to receive them.

http://www.canada.com/saskatoonstarphoenix...9b-f3c2dbdbb264

 

[joeiannuzzi]

Canadian buyers face growing financing hurdles

PALM SPRINGS - If you bought property in California, Arizona, Nevada or Florida before April 2008, you may have secured yourself the best financing terms Canadians are likely to see for some time.

At that point, foreign investors, including Canadians, were required to put down as little as 20 per cent, and were offered interest rates between five and six per cent.

As the American real estate crisis deepened, increasing numbers of financial institutions began to indicate the drastic impact it was having on their bottom line, and subsequently their ability or interest in lending money on properties located in these four hard-hit states. Down payment requirements went up, along with interest rates, for everyone -- but it seems to have hit foreign investors hardest.

http://www.canada.com/edmontonjournal/news...6e-e4ce7805bcf8